Sales & Marketing

Are consumers "potential suckers to be exploited"?

1 min read

29 March 2010

Matthew Taylor, chief executive of the Royal Society for the Arts, Manufactures and Commerce (RSA), says the rise of the no-frills, low-margin online business model is pushing businesses into finding new ways of making money.

Matthew Taylor raises an important point: as the internet makes price comparisons even easier – and drives down prices – businesses that refuse to change will be in trouble. Any consumer sector that charges more than it needs to for basic services faces the threat of a cheaper entrant stealing a major market share.

But in his blog post, the RSA’s vocal chief executive warns that this is creating a new problem: hidden extras.

He writes: “Every customer is seen as someone who can and should be pushed into paying for additional things above the basic offer.

“This is fine when we are talking about add-on luxuries that people choose to buy, but the problem comes when the goal is to exploit customers’ vulnerability to make a fast buck.”

Using the example of overpriced extended warranties on electrical goods, Taylor asks whether the overall effect on society is “malign”.

“I don’t suppose anyone wants to abandon the benefits of competitive markets, but something is lost in society when those who work in the service sector are encouraged to see customers not as people to please and help, but as potential suckers to be exploited.”

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